Why is Japan not producing mobiles like China, even though Japan is far more advanced in technology?

Replied thru Quora by:-

Matsunami Taijin, former Manager, Corporate Planning (1979-2016)

Updated May 24, 2019

Thanks for the request. Though I am not an expert in this field, but as a general marketing case study, I would like to give you some histories and current business model scenarios around mobile phones.

1. Galapagos Mobile
   
   
   Japan was one of the earliest developers of mobile phones and started the world’s first mobile internet access service called “i-Mode”. Refer to Wiki for details; i-mode - Wikipedia It became very popular in Japan and became a national standard while. in other parts of the world, it was way too advanced and Japan failed to make it a global standard.
   
   
   Yet i-Mode was so popular, further domestic development continued to dominate foreign competition and made the Japanese mobile market far different from any other country’s. It was then called Galapagos Mobile because of its unique evolution, just like those uniquely evolved creatures in Galapagos islands.
   
   
   Soon after an iPhone was released, many Japanese jumped to it, making the i-Mode obsolete very quickly. But, again due to the domestic forces, Japanese phone makers continued releasing new Galapagos mobiles. Google then launched Android which, in parallel with iPhone, became the global standards.
2. iPhone/Android Domination; commoditization and assembly cost
   
   
   Since Android is an open source OS, anybody could develop their own smart phone relatively easily and all the technical advantages Japan had accumulated by then became void or useless.
   
   
   Japanese phone makers could develop their own versions of Android mobiles; Sony actually does so. But then the key issue becomes assembly costs where countries like Korea, Taiwan, and China had a definite advantage over Japan. Even Sony decided to assemble its Xperia series in Taiwan.
3. Shift in Business Model
   
   
   In parallel to the transition above, Japanese companies also failed in to keep pace in manufacturing LCD display devices. Until 15 years ago, every Japanese consumer electronics manufacturer was producing LCD displays, which also became a commodity. Except for two companies today, no LCD’s are made in Japan.
   
   
   What Japanese electronics companies decided to do in the mobile phone market then was to shift focus from being a product supplier to a component supplier. (See the chart below from an article in the Wall Street Journal, Dec 16, 2010 edition and written by the Asia Development Bank.)

As you can see, Japanese companies are making the most money out of the iPhone. The situation is quite similar in other Android phones, even today.

A typical example is the image sensor used in phone cameras. Sony enjoys almost total domination in this semi-conductor field. There are also many other components where Japanese companies offer highly competitive, compact, and high quality parts.

In conclusion, Japanese companies really are benefiting from the growing mobile phone market. Roughly one third of all global sales flows into Japanese companies. You could say their are winners, not losers.

But I agree, it is sad to see statistics showing almost no mobile phones are being made in Japan.